Amazon’s offer of 70% applies only to those using the DTP platform so those who are vendors will not be affected. Amazon and publishers are in pricing death match that Amazon intends to win. Amazon’s first move was to discount all hardcovers to $9.99. Publishers have retaliated by withholding ebooks for its major hardcovers and by pricing the ebooks at super premium prices. For example, St. Martin’s Press, a Macmillan subsidary, and Pocket, often price the digital versions of paperbacks at $9.99 up to $14.99. Amazon’s response? We’ll give you 70% of the list price if you follow certain restrictions:

The author or publisher-supplied list price must be between $2.99 and $9.99

This list price must be at least 20 percent below the lowest physical list price for the physical book

The title is made available for sale in all geographies for which the author or publisher has rights

The title will be included in a broad set of features in the Kindle Store, such as text-to-speech. This list of features will grow over time as Amazon continues to add more functionality to Kindle and the Kindle Store.

Under this royalty option, books must be offered at or below price parity with competition, including physical book prices. Amazon will provide tools to automate that process, and the 70 percent royalty will be calculated off the sales price.

The 70 percent royalty option is for in-copyright works and is unavailable for works published before 1923 (a.k.a. public domain books). At launch, the 70 percent royalty option will only be available for books sold in the United States.

For epublished authors who are sold in the Kindle store, they might choose to self publish at 70%. I’ve heard from ebook authors that the Kindle sales far exceed every other retail source. This looks to be a big push for its self publishing platform.

Angry Amazon readers who can’t get the book in digital format have started leaving one star reviews on all books that are either priced too high or not in ebook format. This leads author Mindy Klasky to rage against Kindle readers who choose the “nuclear” option of the one star. I anticipate more of this conflict to occur because of the uncertainty of the digital publishing marketplace.
One Australian publishing guru suggests that ebooks are only additive and that traditional publishing will continue to flourish.

“Old media doesn’t get a lot of attention in a world where there is a lot of new media, but in fact people have a strong book buying habit,” said Melbourne University’s Professor Davis.

“There is a ritual to reading that people like to go through and I think a lot of people will continue to be attached to that ritual,” he said, adding that people enjoy going into a “private reverie” when browsing bookstore shelves.

Though initially resistant to a new paradigm, by multiple accounts Apple has agreed in principal to do business with publishers under what is called the agency model–as opposed to the wholesaling model currently in place for ebook sales and most physical book sales. In the agency model, the publisher is considered as keeping possession of the actual goods (the ebook files) and it pays a commission to its authorized selling partners. So the publisher sets the retail price of the ebooks, and the commissioned agents have no ability to change that price. Ebooks sold under the agency model would be offered to any established trading partners who agree to the commission and other particulars.

One thing that we know is that the major publishers are worried about the ebook price point and want to raise it. Of course, publishers don’t really care that consumers don’t value ebooks because there is no resale, trade or share component; but they do want readers to value ebooks in the same manner as they value print books. Thus, the message here is that publishers will be in control of pricing with Apple. This is all well and good, but the Amazon App is available through the App store. How many readers will just download the Amazon App instead of buying the expensive Apple books and will Apple really stand for that? Apple was the one who pushed for the $.99 song price.

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Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She self publishes NA and contemporaries (and publishes with Berkley and Montlake) and spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty.
You can reach Jane by email at jane @ dearauthor dot com

7 Comments

I could be wrong about this but my pattern of shopping at Amazon is not browsing for things I didn’t know existed, it’s almost always tracking down a specific book or author I want. So if it’s not on sale through Amazon, I’ll go elsewhere. And once Amazon starts losing its reputation for selling ‘everything’, it stops being the consumer destination of choice.

So, I think publishers are in a greater position of strength than perhaps they realise. While Amazon may still dominate the market, it is incredibly easy these days for customers to move their custom elsewhere at the click of a button. In the UK, the Book Depository is almost always cheaper than Amazon since it offers free shipping. And if publishers can sell directly through their own websites, they can set whatever price they want.

If Amazon wants to sell books, it has to play nice with the people who publish them.

I’m a browser on Amazon. Sometimes I just log on to see what my recommendations are (or the Gold Box Deal). I am also not buying any version of a book where the Kindle version is over the price of a hard copy. Amazon isn’t pissing me off– publishers are.

Have not left one star reviews due to price of Kindle edition nor am likely to do so just because that’s not what reviews are for.

Interesting to know if Amazon is removing these one star reviews on request though because this is the type of review they legitimately state they remove– reviews that don’t address the content of the product.

Actually it does affect publishers and possibly in a direct way. Those authors with a valuable backlist–where ebook rights haven’t been assigned…those authors can choose to use DTP (Amazon’s upload) and make 70 percent of the sale. OR they can sign those rights to a publisher…and…get?

For those books that are in confusion (publisher saying they own the rights, authors claiming the rights) the publishers now have incentive to negotiate and do so quickly. In fact, negotiation for e-rights with any book is probably going to get a lot more interesting.

I think it’s fabulous news. Someone else posted on another blog that Amazon is making a grab for backlist and authors. Could be.

Those authors with a valuable backlist-where ebook rights haven't been assigned…those authors can choose to use DTP (Amazon's upload) and make 70 percent of the sale. OR they can sign those rights to a publisher…and…get?

Unless you’re with Random House, who are argue that though eBooks may not have existed when you signed the contract they own the rights anyway.

Ugh, elderly version of IE won’t let me edit my comments any more (work computer, but it’s the end of the day and so quiet!).

In the UK, the Book Depository is almost always cheaper than Amazon since it offers free shipping. And if publishers can sell directly through their own websites, they can set whatever price they want.

On that note, did you know the Book Depository is offering free eBook downloads? PDFs only, and pretty much all out of copyright books, but you don’t even need to go through a checkout. They’re gearing up to open their own eBooks store in the next few months. Having already found that BD has books Amazon doesn’t, they’re doing a very good job at thoroughly converting me!

Yes, Random House is trying to tie up the rights so it’s a problem for a number of authors. But there are a lot of other authors who could benefit if they so choose. There’s businesses popping up all over offering to scan/copy-edit/format books for ebook distribution. I think it’s a great opportunity for some–and Amazon isn’t shy about trying to make it happen.

I like book depository also. But if you’re after public domain titles you might check manybooks.net. I hear their formatting is the best, and the public domain titles are free. (Full disclosure: I haven’t actually used manybooks as I got a few public domain titles free from B&N when I signed up with their Nook for PC, and I have read many other from the library, but my book club lauds manybooks frequently.)

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